Question

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle.
Which of the following statements is most likely true of StoreAll Inc. in this scenario?
A. It has a competitive advantage in the industry.B. It has a competitive disadvantage in the industry.C. It has competitive parity with other firms in the industry.D. It has formed a strategic alliance with other firms in the industry.

Answer 1

Answer:

A. It has a competitive advantage in the industry

Explanation:

Competitive advantage is a condition where one company has an advantage of making or producing the same product for lesser costs or other benefits.

There are two main types of competitive advantages . One is the external and the other is the internal. The external factors include the  advantages of sale over other industries or market pricing or other marketing strategies. the internal factors include the lower costs or high standard production etc.